BRISBANE, Australia (Dow Jones)--Eli Lilly & Co. (LLY) has partnered with the Australian state of Queensland to raise a potential $250 million venture capital fund.

Lilly has pledged up to 20% of the fund, while the Queensland government has contributed $25 million. Other unnamed strategic U.S. investors have also agreed to participate, according to a Queensland government press release issued by state Premier Anna Bligh.

The unnamed venture fund will be based in Brisbane, and will focus on biotechnology investments in Australia and southeastern Asia.

Lilly has had a presence in Australia for 50 years. It has several partnership deals in the state of Queensland and has invested in one start-up there: St. Lucia-based Protagonist Pty., as part of a $9 million Series A round in 2006. Lilly spokesman Mark Taylor said that by investing in the fund, the company will formalize and deepen its relationship to the region.

"Queensland is an important biotech hub in Southeast Asia," Taylor said. "And Premier Bligh is keen on getting more biotech to Queensland."

Taylor said the deal between Lilly and the state was formalized at the Biotechnology Industry Organization international conference in Chicago earlier this month. He said the fund is still being raised and declined to say when he expected it to close.

Taylor said the investment also signals Lilly's interest in the region. "It's not just Australia," he said. "This fund will invest all across the southeast of Asia."

Queensland made its investment from its Future Growth Fund, which was established in 2006 with proceeds from the sale of several state-owned energy companies and invests in economic and environmental projects in the state. According to its 2009 annual report, the fund had total assets of A$1.7 billion ($1.41 billion).